Asia-Pacific Rebalance 2025 · 2020-04-17 · 115 | 5. ANALYSIS OF CAPABILITY GAPS AND SHORTFALLS...

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CONTRIBUTING AUTHORS Ernest Bower, Victor Cha, Heather Conley, Ryan Crotty, Melissa Dalton, Bonnie Glaser, Rebecca Hersman, Murray Hiebert, Christopher Johnson, Thomas Karako, Stephanie Sanok Kostro, Gregory Poling, Richard Rossow, Sharon Squassoni, Nicholas Szechenyi, and Denise Zheng Asia-Pacific Rebalance 2025 Capabilities, Presence, and Partnerships JANUARY 2016 An Independent Review of U.S. Defense Strategy in the Asia-Pacific STUDY DIRECTORS Michael Green Kathleen Hicks Mark Cancian TEAM LEADS Zack Cooper John Schaus

Transcript of Asia-Pacific Rebalance 2025 · 2020-04-17 · 115 | 5. ANALYSIS OF CAPABILITY GAPS AND SHORTFALLS...

  • contributing authorsErnest Bower, Victor Cha, Heather Conley, Ryan Crotty, Melissa Dalton,

    Bonnie Glaser, Rebecca Hersman, Murray Hiebert, Christopher Johnson,

    Thomas Karako, Stephanie Sanok Kostro, Gregory Poling, Richard Rossow,

    Sharon Squassoni, Nicholas Szechenyi, and Denise Zheng

    Asia-Pacific Rebalance 2025 Capabilities, Presence, and Partnerships

    J A N U A R Y 2 0 1 6

    An Independent Review of U.S. Defense Strategy in the Asia-Pacific

    study directors

    Michael Green

    Kathleen Hicks

    Mark Cancian

    team leads

    Zack Cooper

    John Schaus

  • contributing authors

    Ernest Bower, Victor Cha, Heather Conley, Ryan Crotty, Melissa Dalton,

    Bonnie Glaser, Rebecca Hersman, Murray Hiebert, Christopher Johnson,

    Thomas Karako, Stephanie Sanok Kostro, Gregory Poling, Richard Rossow,

    Sharon Squassoni, Nicholas Szechenyi, and Denise Zheng

    An Independent Review of U.S. Defense Strategy in the Asia-Pacific

    study directors

    Michael Green

    Kathleen Hicks

    Mark Cancian

    team leads

    Zack Cooper

    John Schaus

    Asia-Pacific Rebalance 2025 Capabilities, Presence, and Partnerships

    J A N U A R Y 2 0 1 6

  • ABOUT CSIS

    FOR OVER 50 YEARS, the Center for Strategic and International Studies (CSIS) has worked to develop solutions to the world’s greatest policy challenges. Today, CSIS scholars are providing

    strategic insights and bipartisan policy solutions to help decisionmakers chart a course toward a

    better world.

    CSIS is a nonprofit organization headquartered in Washington, D.C. The Center’s 220 full-time

    staff and large network of affiliated scholars conduct research and analysis and develop policy

    initiatives that look into the future and anticipate change.

    Founded at the height of the Cold War by David M. Abshire and Admiral Arleigh Burke, CSIS was

    dedicated to finding ways to sustain American prominence and prosperity as a force for good in

    the world. Since 1962, CSIS has become one of the world’s preeminent international institutions

    focused on defense and security; regional stability; and transnational challenges ranging from

    energy and climate to global health and economic integration.

    Thomas J. Pritzker was named chairman of the CSIS Board of Trustees in November 2015. For-

    mer U.S. deputy secretary of defense John J. Hamre has served as the Center’s president and

    chief executive officer since 2000.

    CSIS does not take specific policy positions; accordingly, all views expressed herein should be

    understood to be solely those of the author(s).

    © 2016 by the Center for Strategic and International Studies. All rights reserved.

    ISBN: 978-1-4422-5916-4 (pb); 978-1-4422-5917-1 (eBook)

    Center for Strategic & International Studies Rowman & Littlefield

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    202-887-0200 | www.csis.org 301-459-3366 | www.rowman.com

  • III

    CONTENTS

    VI | EXECUTIVE SUMMARY

    X | ACKNOWLEDGMENTS

    1 | 1. INTRODUCTION

    2 Overview of the Rebalance to Asia

    5 Study Background

    6 Report Methodology

    9 | 2. U.S. INTERESTS AND RISKS IN ASIA

    10 U.S. Interests in Asia

    10 China

    19 North Korea

    23 Russia

    27 Nonstate Risks

    31 | 3. U.S. FORCE POSTURE IN THE ASIA-PACIFIC

    32 Current U.S. Force Posture in the Asia-Pacific

    42 United States Presence Activities

    43 Additional Security Challenges

    49 | 4. THE ROLE OF ALLIES, PARTNERS, AND REGIONAL ORGANIZATIONS

    51 Japan

    60 South Korea

    66 Australia

    73 Philippines

    78 Thailand

    82 India

    87 Taiwan

    94 Malaysia

    97 Singapore

    101 Indonesia

  • IV

    105 Vietnam

    108 Security Contributions of Regional Organizations

    115 | 5. ANALYSIS OF CAPABILITY GAPS AND SHORTFALLS

    117 Air Superiority and Global Strike

    123 Naval and Maritime Forces

    131 Ground Forces

    135 Special Operations Forces

    138 Missile Defense

    142 Space

    144 Intelligence, Surveillance, and Reconnaissance

    148 Cyber

    151 Electronic Warfare

    155 Nuclear Forces

    159 Munitions

    163 Strategic Mobility, Readiness, and Logistics

    171 Theater Security Cooperation

    177 | 6. ARCTIC AMBITIONS AND THE U.S. NAVY’S ARCTIC ROADMAP

    178 Understanding the Arctic: A Rapidly Changing Region

    180 PACOM’s Changing Arctic Responsibilities

    181 Russia’s Strategic Interests in the Arctic

    183 Increased Presence of Asian Countries in the Arctic

    187 The U.S. Navy Arctic Roadmap

    188 Lack of U.S. Icebreaking Capabilities and Future U.S. Challenges

    189 Policy Recommendations for the Arctic

    193 | 7. RECOMMENDATIONS FOR SUSTAINING THE REBALANCE

    195 1. Align Asia Strategy within the U.S. Government and with Allies and Partners

    197 2. Strengthen Ally and Partner Capability, Capacity, Resilience, and Interoperability

    201 3. Sustain and Expand U.S. Military Presence

    208 4. Accelerate Development of Innovative Capabilities and Concepts

  • V

    213 | APPENDICES

    214 Appendix A: National Defense Authorization Act of 2015—Section 1059

    216 Appendix B: 2012 Study Recommendations

    219 Appendix C: Dealing with a Changed Fiscal Environment

    225 Appendix D: Select CSIS Study Team Recommendations, in Brief

    230 Appendix E: About the Authors

    240 Appendix F: Acronyms

    247 Appendix G: References

    Figures

    17 Figure 1: Chinese Headquarters Locations and Missile Ranges

    22 Figure 2: North Korean Military Headquarters and Nuclear Sites

    27 Figure 3: Nonstate Concerns in the Asia-Pacific

    33 Figure 4: Significant U.S. Military Elements in the PACOM AOR

    36 Figure 5: Major U.S. Forces in Japan (main islands)

    37 Figure 6: Major U.S. Forces in Okinawa

    39 Figure 7: Major U.S. Forces in South Korea

    41 Figure 8: Main U.S. Facilities in Guam

    50 Figure 9: Regional Military Forces in the Asia-Pacific

    53 Figure 10: Japanese Air, Naval, and Amphibious Force Posture

    63 Figure 11: South Korean Force Posture

    72 Figure 12: Australian Air and Naval Bases and Operating Locations

    109 Figure 13: Participation in Major Regional Organizations

    179 Figure 14: Arctic Sea Routes

    220 Figure 15: Recent Fiscal Projections DOD Base Budget (constant dollars, billions),

    FY 2006–2021

  • VI

    EXECUTIVE SUMMARY

    IN NOVEMBER 2011, PRESIDENT OBAMA DECLARED, “the United States is turning [its] attention to the vast potential of the Asia Pacific region.” This announcement of a deliberate

    “rebalance” to Asia and the Pacific reflected the American people’s growing recognition of the

    importance of the region to U.S. interests and the need to reassert American engagement and

    leadership after the uncertainty caused by the 2008 financial crisis and a decade of combat op-

    erations in Southwest Asia. The Obama administration’s rebalance built on policies begun in the

    George W. Bush and prior administrations and added critical new elements such as participation

    in the East Asia Summit and enhanced engagement with Southeast Asia.

    Overall, this increased focus on Asia and the Pacific enjoyed bipartisan support in the Congress,

    but concerns emerged on both sides of the aisle about whether the administration had articu-

    lated a strategy to justify the resources required for new military construction needed to support

    U.S. presence in the region. Seeking an external perspective on the administration’s approach,

    Congress required the Department of Defense to commission an independent assessment of

    U.S. strategy and force posture in the Asia-Pacific under the 2012 National Defense Authorization

    Act. Tasked by the Department to conduct that study, the Center for Strategic and International

    Studies (CSIS) concluded in September 2012 that there was a strong consensus in the U.S. gov-

    ernment and among allies and partners with respect to the objectives of rebalancing U.S. force

    posture, but no durable framework to guide specific lines of effort.

    The 2012 CSIS study found that the administration needed a clearer articulation of U.S. strategy

    to explain the requirement for forward posture. CSIS noted that the Pacific Command requires a

    force posture that in peacetime enables the U.S. military to build partner capacity, cooperate on

    common challenges such as humanitarian assistance, and conduct joint and combined training

    and exercises to enhance interoperability, and in wartime can prevail and achieve U.S. objectives.

    To that end CSIS made recommendations, including better alignment of regional engagement

    strategy within Pacific Command and with other government agencies; the stationing of an

    additional attack submarine in Guam; deployment of a second amphibious ready group to the

    Pacific; deployment of a Terminal High Altitude Area Defense battery to Guam; construction of

    a second fuel pipeline on Guam; and rotational deployments of U.S. forces to South Korea. Many

    of these recommendations were subsequently implemented by the Department of Defense, and

    Congress has approved the Department’s annual requests for regional military construction. The

    2012 study recommendations are at Appendix B.

    Since 2012, however, the international security environment has become significantly more

    complicated. China has accelerated the frequency of its coercive activities and the pace of its

    island-building in the East and South China Seas, and North Korea has continued developing its

    nuclear and ballistic missile capabilities. Meanwhile, Russian revanchist activities and the emer-

    gence of the Islamic State of Iraq and the Levant have competed with the Asia-Pacific for atten-

    tion and resources. Economically, the United States is recovering from the global financial crisis

  • VII

    and Congress has passed Trade Promotion Authority necessary to complete the Trans-Pacific

    Partnership, yet political challenges in Washington have resulted in steep cuts in planned defense

    spending projections and limited the Defense Department’s flexibility to respond to strategic

    changes. Militarily, the Pacific Command has fully embraced the rebalance, but the anti-access

    challenge is worsening and China’s tolerance for risk has exceeded most expectations. Taken

    together, these trends demonstrate that the United States will need to remain focused on imple-

    menting the rebalance to the Asia-Pacific and adapting as regional circumstances change.

    Recognizing the need to review the rebalance in light of changes in the security environment,

    Congress tasked the Department of Defense to commission a new independent assessment

    under the 2015 National Defense Authorization Act. This study revisits earlier recommendations

    on U.S. strategy and force posture, but pursuant to the congressional tasking, it also assesses the

    capabilities of U.S. allies and partners in light of evolving regional security challenges. The seven

    sections that follow address: 1) the overall strategic picture in Asia and the methodology for this

    study; 2) U.S. interests and risks in the region; 3) the status of U.S. strategy and current and future

    force posture; 4) the roles and capabilities of regional allies and partners; 5) capability gaps and

    shortfalls; 6) security issues in the Arctic; and 7) recommendations for U.S. strategy and force

    posture in the Asia-Pacific region toward 2025.

    This study reconfirms the 2012 CSIS finding that the United States will continue to pursue three

    historically interrelated interests in Asia and the Pacific: protection of the American people and

    U.S. allies; promotion of trade and economic opportunity; and support for universal democratic

    norms. Forward military posture and engagement will remain indispensable to these objectives

    in the years ahead, both to shape patterns of cooperation and to ensure effective contingency

    responses if crises or conflicts do occur.

    Nevertheless, the study team is concerned that the administration’s rebalance effort may be insuf-

    ficient to secure these interests. Chinese and North Korean actions are routinely challenging the

    credibility of U.S. security commitments, and at the current rate of U.S. capability development, the

    balance of military power in the region is shifting against the United States. Robust funding is needed

    to implement the rebalance. Capping resources at the budget levels set by the Budget Control Act

    would severely constrain implementation of the rebalance. Although the 2015 budget agreement

    was a positive step, it does not provide the needed long-term funding levels and stability. To fully

    implement the recommendations of this study requires resources at a level above the president's

    budget. The rebalance to the Asia-Pacific will therefore require the Congress to forge a long-term

    bipartisan agreement to fund defense at the higher levels for which there is a broad consensus

    The CSIS study team thus identified four broad lines of effort that build upon and go beyond cur-

    rent administration efforts to sustain and implement the defense component of the rebalance in

    a more competitive and challenging regional environment.

  • VIII

    • First, Washington needs to continue aligning Asia strategy within the U.S. government

    and with allies and partners. The study finds that although the Obama administration has

    issued a series of speeches and documents on the rebalance, there remains no central

    statement of the U.S. government’s rebalance strategy. In interviews with leaders through-

    out the Department of Defense, in other U.S. departments and agencies, on Capitol Hill,

    and across the Asia-Pacific, the study team consistently heard confusion about the rebal-

    ance strategy and concern about its implementation. Indeed, a 2014 study by CSIS found

    that language used to describe the rebalance has changed substantially (and repeatedly)

    since its announcement in 2011. Addressing this confusion will require that the executive

    branch develop a clear and coherent strategy and discuss that strategy with Congress as

    well as U.S. allies and partners across the world. We recommend preparing an Asia-Pacific

    strategic report; increasing administration outreach to Congress; ensuring alignment be-

    tween strategy and resources; better coordinating U.S. strategy with allies and partners; and

    expanding confidence building and crisis management with China.

    • Second, U.S. leaders should accelerate efforts to strengthen ally and partner capability, ca-

    pacity, resilience, and interoperability. The study finds that security challenges are increas-

    ingly outpacing the capabilities of frontline regional states. Building ally and partner security

    capability and capacity is in the United States’ interest. Many states are struggling to mitigate

    regional security risks that range from major humanitarian crises to maritime disputes to mis-

    sile threats. Increased regional capacity to manage security challenges lessens the dependen-

    cy on the United States. Strengthening security capability, capacity, resilience, and interoper-

    ability in Asia requires a strategy that differentiates the requirements of highly capable allied

    militaries from those of allies and partners with more basic defense needs. We recommend

    pursuing federated approaches with highly capable regional allies; building maritime secu-

    rity capacity in Southeast Asia; forming a standing U.S. joint task force for maritime security;

    encouraging Japan to establish a joint operations command; and further deepening regional

    whole-of-government humanitarian assistance and disaster relief expertise.

    • Third, the United States should sustain and expand U.S. military presence in the Asia-

    Pacific. The study finds that leaders in Washington and in foreign capitals are concerned

    about the long-term resilience and sustainability of legacy force posture, particularly in

    Northeast Asia. The U.S. military is a stabilizing force in the region, helping to deter conflict

    on the Korean Peninsula and manage crises from the East China Sea through the Indian

    Ocean. Yet, the Chinese People’s Liberation Army’s anti-access/area denial capabilities that

    many once viewed as Taiwan-specific are rapidly expanding to the Second Island Chain and

    beyond, affecting not only an increasing number of U.S. allies and partners, but also U.S.

    territories such as Guam. Diversification of U.S. military posture remains critical not simply

    for resilience against challenges in Northeast Asia, but also to contend with the growing

    importance of Southeast Asia and the Indian Ocean region. We reject the option of with-

    drawal from the Western Pacific because of these new challenges. Such a withdrawal would

    lead to rapid deterioration of the security environment and render operations more diffi-

    cult rather than easier. In this report, the authors offer recommendations needed to sustain

  • IX

    a predictable, credible, and robust forward presence capable of shaping the peacetime

    security environment and prevailing in the event of conflict. We recommend continuing

    to implement and resource key posture initiatives; increasing surface fleet presence; im-

    proving undersea capacity; deploying within the theater additional amphibious lift to allow

    enhanced theater-wide engagement and crisis response; continuing to diversify air operat-

    ing locations; bolstering regional missile defenses; advancing and adapting the U.S. Army’s

    Regionally Aligned Forces concept; addressing logistical challenges; stockpiling critical pre-

    cision munitions; and enhancing intelligence, surveillance, and reconnaissance cooperation

    with allies within the region.

    • Fourth, the United States should accelerate development of innovative capabilities

    and concepts for U.S. forces. The study finds that as the United States looks to clarify its

    Asia-Pacific strategy, strengthen regional allies and partners, and diversify military posture,

    U.S. leaders will also need to pursue innovative capabilities and concepts to address the

    most challenging military risks. The authors identified critical capability gaps in two areas.

    First are those capabilities required to defend against emerging risks to U.S. forces, such as

    the growing ballistic missile risk to U.S. ships and forward bases. Second are those capabil-

    ities that would give the United States an asymmetric, cost-imposing counter to potential

    regional competitors. The United States requires both sets of investments to ensure that

    the U.S. military retains the ability to project combat power in the Asia-Pacific well into the

    future. We recommend institutionalizing a culture of experimentation; encouraging rapid

    platform evolution; developing advanced long-range missiles; funding innovative missile

    defense concepts; fielding additional air combat systems; exploiting the U.S. undersea ad-

    vantage; and augmenting space, cyber, and electronic warfare capabilities.

    Executing an effective Asia strategy will require a clear and consistent approach across the U.S.

    government; continuous dialogue with regional allies, partners, and competitors; robust eco-

    nomic engagement throughout the region; development of new military capabilities for de-

    terrence and defense; prioritization of critical activities and their associated funding streams;

    and close cooperation between the executive and legislative branches. This study assesses U.S.

    progress to date and recommends initiatives necessary to protect U.S. interests in the Pacific

    Command area of responsibility through 2025.

  • X

    ACKNOWLEDGMENTS

    THIS PROJECT WOULD NOT HAVE BEEN POSSIBLE WITHOUT the combined ef-forts of the International Security Program and the Asia Team at CSIS. The project co-directors,

    Michael Green, Kathleen Hicks, and Mark Cancian, thank the many experts throughout CSIS who

    contributed to the study, beginning with Zack Cooper and John Schaus, and including Ernest

    Bower, Victor Cha, Heather Conley, Ryan Crotty, Melissa Dalton, Bonnie Glaser, Rebecca Hers-

    man, Murray Hiebert, Christopher Johnson, Thomas Karako, Stephanie Kostro, Gregory Poling,

    Rick Rossow, Sharon Squassoni, Nicholas Szechenyi, and Denise Zheng. In addition, the directors

    would like to thank Jake Douglas and Andrew Metrick for extensive research and editing support,

    as well as Caroline Amenabar, Alison Bours, and Paul Franz for developing graphics for the study.

    Finally, the study directors would like to thank Anthony Bell, Kathryn Easop, Jaimie Hoskins, Da-

    vid Hookey, Tanya Jain, William Morris, Amber O’Rourke, Zachary White, and others who contrib-

    uted to the final product.

    The authors thank the Department of Defense for their support in conducting this study. In par-

    ticular, the Office of the Secretary of Defense and the staff at the U.S. Pacific Command provided

    valuable time and information for this review. We also express our appreciation to the Congress,

    particularly the members and staffs of the House and Senate Armed Services Committees for

    their support in conducting this report.

    In addition to those within the U.S. government, the authors consulted with many nongovern-

    mental experts in Washington as well as government officials and nongovernment experts in the

    Asia-Pacific region. Their insights and perspectives informed the report’s findings and analysis,

    particularly on regional views of the United States and of the rebalance to Asia.

    Finally, we wish to thank the senior review group for providing their valuable time to review the

    findings of this report: the Honorable Richard Armitage, Lt. Gen. Thomas Conant (USMC, ret.),

    the Honorable Michèle Flournoy, Lt. Gen. Wallace “Chip” Gregson (USMC, ret.), Gen. Gary North

    (USAF, ret.), Adm. Gary Roughead (USN, ret.), Gen. Walter “Skip” Sharp (USA, ret.), and the Hon-

    orable James Steinberg. The authors are also grateful to Mr. Andrew Shearer, former national

    security adviser to the prime minister of Australia, who provided valuable insights while a visiting

    fellow at CSIS.

    Although the findings of this report remain those of the authors, this study would not have been

    possible without the contributions of all those listed above.

  • 1 | I N T R O D U C T I O N

  • INTRODUCTION

    2

    The Obama administration’s rebalance to the Asia-Pacific region was intended to demonstrate the

    United States’ commitment to work closely with allies and partners to maintain regional security and

    prosperity. Since its announcement in 2011, administration officials have taken actions to execute the

    rebalance. Congressional support has been necessary for implementation of many of these actions,

    but some questions have persisted in Congress about aspects of U.S. strategy. In an effort to address

    these concerns, the National Defense Authorization Act of 2012 required that the Department of

    Defense (DOD) commission an independent assessment of U.S. strategy and force posture in the

    Asia-Pacific. The Center for Strategic and International Studies was tasked with that independent

    assessment and issued its findings in September 2012, which helped to secure funding for critical ef-

    forts and identified potential new initiatives. Now, three years after CSIS’s first study, the Congress has

    again requested an independent assessment that takes into account not only U.S. strategy and force

    posture, but also that of U.S. allies and partners. The assessment that follows fulfills this tasking and

    sets forth an agenda for the United States in the Asia-Pacific through 2025.

    OVERVIEW OF THE REBALANCE TO ASIA

    President Barack Obama spoke of the United States’ interest in, and aspirations for, the Asia-Pacif-

    ic during his 2011 speech to the Australian Parliament.

    Here, we see the future. As the world’s fastest-growing region—and home to

    more than half the global economy—the Asia Pacific is critical to achieving

    my highest priority, and that’s creating jobs and opportunity for the American

    people. With most of the world’s nuclear power and some half of humanity,

    Asia will largely define whether the century ahead will be marked by conflict or

    cooperation, needless suffering or human progress.1

    Subsequently, then-Secretary of State Hillary Clinton published a piece in Foreign Policy extolling

    “America’s Pacific Century.”2 The piece highlighted the significant role the Asia-Pacific region plays

    for the United States, and how the United States has been, and will remain, engaged in the region.

    As explained by the Obama administration, the rebalance to the Asia-Pacific is a whole of gov-

    ernment effort with three primary lines of effort. First (and most visible to date) is the security

    component. Second is the economic element, represented by the Trans-Pacific Partnership.

    Third is the pursuit of human dignity.3 In this study, Congress required an assessment of only the

    security element of the rebalance, although both Congress and the study authors recognize the

    importance of the other two components.

    In August 2015, Secretary of Defense Ashton Carter described the defense component of the

    Asia-Pacific rebalance as consisting of the following four elements:

    • Investing in future capabilities relevant to the Asia-Pacific security environment;

    • Fielding adequate numbers of key capabilities already developed and finding new ways to

    use existing systems;

  • 3

    ASIA-PACIFIC REBALANCE 2025

    • Adapting regional force posture to be “geographically distributed, operationally resilient,

    and politically sustainable,” including deployment of more rotational forces into more plac-

    es in Asia and an increased pace of exercises and training;

    • Reinforcing alliances and partnerships.4

    Secretary Carter also noted that, amid its rebalance efforts, the U.S. relationship with China

    would be a complex one, mixing elements of cooperation and competition. The U.S. rebalance

    policy seeks to create space for China to contribute to peace and prosperity throughout the re-

    gion while deterring Chinese aggression or coercion and defending U.S. interests.

    Assessing the Defense Component of Rebalance

    Four years into the rebalance, the Defense Department should receive high marks for sustained atten-

    tion to the Asia-Pacific. Measured by senior-leader focus on the region, including meeting regularly

    with senior leaders from the region—both in Asia and in the United States—the United States is main-

    taining a steady pace of engagement. Further, the Defense Department has increased the proportion

    of its capabilities dedicated to or deployed in the region. The Pentagon has also deployed new capa-

    bilities to the Asia-Pacific, including the F-22, Virginia-class submarines, and Terminal High Altitude

    Area Defense (THAAD), among others. Together with the negotiation of new and updated posture

    agreements with regional allies and partners, and the increase in exercises with countries from the

    Indian Ocean region through East Asia, these changes suggest the Defense Department is indeed

    focused on a long-term rebalance strategy that includes capabilities, posture, and relationships.

    Nevertheless, the United States will need to continue and in some cases accelerate investments

    in regional relationships, posture, operational concepts, and capabilities if it is to achieve the

    strategic goals of the rebalance. The past 14 years of war have left the military services with

    significant challenges in recapitalizing equipment used at a pace faster than programmed, rees-

    tablishing full-spectrum force readiness, and confronting an expanding range of challenges from

    state and nonstate actors globally. It is doing so while drawing down forces and structure and,

    the recent two-year budget deal notwithstanding, with lower long-term defense spending pro-

    jections than planned even a few years ago. China’s rapidly expanding military investments and

    increasingly coercive actions in the region demonstrate both the long-term and near-term chal-

    lenges facing the United States and its allies and partners in protecting vital regional and global

    interests. Although Washington seeks to cooperate with Beijing where it can, the United States

    must also ensure that its engagements, posture, concepts, and capabilities allow it to shape, de-

    ter, and, if necessarily, decisively defeat threats to U.S. interests. The threat of invasion by North

    Korea continues to decrease, but the North’s missile and nuclear programs continue unabated

    while scenarios for instability within North Korea appear less remote going forward.

    Over the last few years, the Asia-Pacific region has witnessed significant developments that require

    a reappraisal of U.S. strategy and force posture, as well as an assessment of the strategy and force

    posture of U.S. allies and partners. Many of these trends have improved prospects for regional securi-

    ty, but some new challenges are emerging, and some existing risks are worsening. These trends span

    issue areas of geopolitics, diplomacy, economics, domestic politics, and military considerations.

  • INTRODUCTION

    4

    Geopolitically, most states in the Asia-Pacific region are embracing closer security and econom-

    ic ties with the United States. At the same time, however, states across the region have become

    more sensitive to China’s growing political, economic, and military power, and are potentially

    vulnerable to Beijing’s increasingly coercive behavior.

    Polls in Asian countries indicate strong support for the rebalance, with the notable exception of

    China.5 The United States is working bilaterally, trilaterally, and multilaterally to reinforce critical

    rules and norms that underpin a secure and prosperous regional and international order. Yet

    despite these efforts, there is more acrimony and tension in the U.S.-China relationship, a general

    deterioration in relations with Russia, and increasing bellicosity from North Korea. In preparing

    this study, the authors heard a consistent refrain from U.S. allies and partners that, despite their

    appreciation for the goals of the rebalance, many regional observers worry that U.S. efforts to

    manage the Iran nuclear negotiations, Russia’s invasion of Ukraine, and conflict with the Islamic

    State of Iraq and the Levant (ISIL) have distracted it from fully implementing the rebalance.

    The administration has taken important steps to reinforce the rebalance strategy, beginning

    with the 2012 Defense Strategic Guidance and recently, the August 2015 Asia-Pacific Maritime

    Security Strategy prepared for Congress.6 The authors also found that the U.S. Pacific Command

    (PACOM) is well aligned with the rest of DOD in its various lines of effort, including theater cam-

    paign planning. Much progress has been made since 2012, when CSIS scholars found significant

    disconnects across the U.S. government and with allies and partners. Nevertheless, the imple-

    mentation of the rebalance may be insufficient to secure U.S. interests. Actions by countries in

    the region routinely challenge the credibility of U.S. security commitments, and U.S. capability

    development is not keeping pace with challenges by potential competitors, resulting in the bal-

    ance of military power in the region shifting against the United States.

    First, the Obama administration still has not articulated a clear, coherent, or consistent strategy for

    the region, particularly when it comes to managing China’s rise. The language used to explain the

    rebalance in administration speeches and documents has varied substantially over the last four

    years.7 The 2012 CSIS independent assessment highlighted this shortcoming, but it remains a

    problem in terms of reassuring allies and partners and sustaining congressional support.

    Second, cuts to the defense budget from 2009–2015 have limited the Defense Department’s ability

    to pursue the rebalance. The October 2015 budget agreement notwithstanding, long-term budget

    uncertainty and the large cuts already implemented represent major changes from the environ-

    ment that existed when CSIS scholars conducted the 2012 review.

    Third, while the U.S. military has instituted major posture changes and is developing new military capabilities to

    strengthen the rebalance, the anti-access/area denial (A2/AD) challenge is increasing and concerns are grow-

    ing about the ability of potential adversaries to hold at risk forward-deployed and forward-operating forces

    throughout the region. Chinese military strategy places a premium on investments in A2/AD capabilities. Its

    A2/AD umbrella includes long-range cruise and ballistic missiles, advanced integrated air and missile defense

    (IAMD) systems, and submarines. The goal of these systems is to restrict or outright deny an attacker freedom

    of entry or maneuver. Chinese investments in cyber; electronic warfare (EW); a blue-water navy; missiles; and

    intelligence, surveillance, and reconnaissance (ISR) capabilities serve as powerful reminders of China’s plans to

  • 5

    ASIA-PACIFIC REBALANCE 2025

    push the United States out of the region in a conflict. These capabilities give China the ability to hold at risk U.S.

    installations and naval assets in the Western Pacific, U.S. allies and partners, and the freedom to use internation-

    al air and waterways on which the U.S. economy depends. Absent major operational or technology break-

    throughs by the United States and its allies and partners, substantial risk remains that China’s strategy could

    undermine the U.S. military’s ability to defend U.S. interests in the Asia-Pacific.

    Fourth, China’s tolerance for risk has exceeded most expectations—as demonstrated by Beijing’s

    increased operational tempo and construction of military airfields and facilities on seven features

    in the Spratly Islands. This risk tolerance requires the United States to reassess its China policy,

    and may lead allies and partners to do the same.

    Taken together, these trends suggest that the U.S. rebalance must be enhanced to fulfill defense

    and deterrence requirements in the PACOM area of responsibility (AOR). Executing an effective

    Asia-Pacific strategy will require a clear and consistent but agile approach; continuous dialogue

    with regional allies, partners, and competitors; robust economic engagement throughout the

    region; development of new military concepts and capabilities for deterrence, defense, and crisis

    management; divestment of lower-priority activities if budget constraints continue; and close

    cooperation between the executive and legislative branches. The pages that follow suggest how

    the United States might adopt just such an approach.

    STUDY BACKGROUND

    In 2012, CSIS released a report entitled “U.S. Force Posture Strategy in the Asia Pacific Region: An In-

    dependent Assessment,” co-directed by David Berteau and Michael Green. That study was conducted

    pursuant to Section 346 of the National Defense Authorization Act for Fiscal Year 2012. The Congress

    required that the Department of Defense commission an independent assessment of force posture

    options for the Pacific Command area of responsibility, to include the following elements: a review of

    current and emerging U.S. national security interests in the Pacific Command area of responsibility; a

    review of current U.S. military force posture and deployment plans of Pacific Command; options for

    the realignment of U.S. forces in the region to respond to new opportunities presented by allies and

    partners; and the views of noted policy leaders and regional experts, including military commanders.

    The 2012 study found that the consequences of conflict with China are almost unthinkable and should

    be avoided to the greatest extent possible consistent with U.S. interests. The study also noted the need

    to achieve the right combination of assurance, dissuasion, and deterrence to maintain a favorable

    peace and avoid conflict. The study concluded, “the ability of the United States to work with allies and

    partners to achieve those peaceful ends will depend on the perceptions, both of allies and partners and

    of China, of the United States’ ability to prevail in the event of conflict. U.S. force posture must demon-

    strate a readiness and capacity to fight and win, even under more challenging circumstances associ-

    ated with A2/AD and other risks to U.S. military operations in the Western Pacific. Forward presence

    and engagement are not simply helpful to shaping the environment and setting the stage for effective

    responses to contingencies—they are indispensable for minimizing the likelihood of larger conflicts.”8

    The 2012 study assessed U.S. strategy and force posture, resulting in a set of policy options de-

    signed to strengthen the rebalance. While the Defense Department has implemented certain rec-

  • INTRODUCTION

    6

    ommendations, such as upgrading U.S. Army Pacific (USARPAC) to a four-star command and sta-

    tioning an additional attack submarine in Guam, much work remains to be done. Most importantly,

    despite the U.S. Pacific Command’s better alignment, Chinese coercive activities in East Asia have

    increased and highlight a growing disconnect between Washington’s policies and rising regional

    threats. This disconnect is evidenced by the increasing concern from regional allies and partners

    that the U.S. commitment to the rebalance is waning.

    2015 Congressional Tasking

    Acknowledging the need for a continued commitment to the Asia-Pacific region, Section 1059 of the

    National Defense Authorization Act for Fiscal Year 2015 required that the secretary of defense com-

    mission an independent review of the U.S. Asia-Pacific rebalance. This study fulfills that tasking. The

    Congress required that the study focus on the 2015 to 2025 period and that it include the following:

    • Risks to U.S. national security interests in the Pacific Command area of responsibility as a

    result of changes in the security environment through 2025;

    • Assessment of the current force posture and planned adjustments by the United States and

    its allies and partners in the region, as well as the expected impact of such adjustments on

    the U.S. strategy to rebalance to the Asia-Pacific region;

    • Evaluation of the key capability gaps and shortfalls of the United States and its allies and

    partners in the Asia-Pacific region, including undersea warfare (including submarines); naval

    and maritime; ballistic missile defense (BMD); cyber; munitions; and intelligence, surveil-

    lance, and reconnaissance capabilities;

    • Analysis of the willingness and capacity of allies, partners, and regional organizations to

    contribute to the security and stability of the Asia-Pacific region, including potential re-

    quired adjustments to U.S. military strategy based on that analysis;

    • Appraisal of the Arctic ambitions of actors in the Asia-Pacific region in the context of cur-

    rent and projected capabilities, including an analysis of the adequacy and relevance of the

    Arctic Roadmap prepared by the navy;

    • Evaluation of theater security cooperation efforts of Pacific Command in the context of

    current and projected threats, and desired capabilities and priorities of the United States

    and its allies and partners;

    • Views of noted policy leaders and regional experts, including military commanders, in the

    Asia-Pacific region.

    Appendix A contains the statutory language and shows how this report addresses each of the

    congressional requirements.

    REPORT METHODOLOGY

    In seeking to fulfill the requirements set forth by the Congress, the study authors established a

    project team consisting of experts on Asia and security from across the institution. Members of

    the project team met with senior officials throughout the Asia-Pacific and conducted research in

  • 7

    ASIA-PACIFIC REBALANCE 2025

    Australia, China, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and

    Vietnam. Members of the project team also traveled within the United States to Guam and Ha-

    waii and consulted relevant officials in the Washington, D.C., region.

    To conduct this study, the CSIS team adopted a strategy-driven, budget-informed approach. This

    analysis begins with national interests, then identifies potential risks to those interests, and finally

    determines a strategy and associated policies. The study assesses U.S., ally, and partner capabil-

    ities and makes recommendations for closing capability gaps and capacity shortfalls. The study

    notes that the fiscal environment will drive the viability of many recommendations and therefore

    includes an assessment of the resource implications of its recommendations.

    Senior Review Group

    In an effort to engage noted policy leaders in Washington, the study team enlisted a senior

    review group to assess the study’s preliminary findings. Members of the review group provided

    valuable insights, but the authors take full responsibility for the content of the study. The senior

    review group included:

    • The Honorable Richard Armitage, former deputy secretary of state;

    • Lt. Gen. Thomas Conant (USMC, ret.), former deputy commander of PACOM;

    • The Honorable Michèle Flournoy, former under secretary of defense for policy;

    • Lt. Gen. Wallace “Chip” Gregson (USMC, ret.), former assistant secretary of defense for Asian

    and Pacific security affairs and former commander of Marine Corps Forces Pacific;

    • Gen. Gary North (USAF, ret.), former commander of Pacific Air Forces (PACAF);

    • Adm. Gary Roughead (USN, ret.), former chief of naval operations and former deputy com-

    mander of PACOM;

    • Gen. Walter “Skip” Sharp (USA, ret.), former commander of U.S. Forces Korea (USFK), Com-

    bined Forces Command (CFC), and United Nations Command (UNC); and

    • The Honorable James Steinberg, former deputy secretary of state.

    Report Structure

    This report responds to the specific requirements set forth in Section 1059 of the 2015 National Defense

    Authorization Act. Section 1 has introduced the report and outlined the congressional tasking and the

    methodology used in this report. Section 2 describes U.S. interests and risks in Asia through 2025. Sec-

    tion 3 addresses the first of three major pillars in the Defense Department’s portion of the U.S. rebalance

    effort: U.S. defense posture in Asia. Section 4 addresses the second major pillar: the role, capabilities,

    and cooperation of regional allies, partners, and organizations. Section 5 addresses the third pillar of

    the defense rebalance: capabilities and concepts, and associated gaps and shortfalls. Section 6 assesses

    the Arctic ambitions of various countries and discusses the U.S. Navy (USN) arctic roadmap, as explicitly

    called for by Congress. Section 7 summarizes the study team’s highest-priority recommendations for

    advancing the U.S. rebalance to Asia. Additional recommendations appear in Section 5 and Appendix D.

  • 2 | U . S . I N T E R E S T S A N D R I S K S I N A S I A

  • U.S. INTERESTS AND RISKS IN ASIA

    10

    When President Obama announced the rebalance to the Asia-Pacific, he proclaimed, “The United

    States is turning its attention to the vast potential of the Asia Pacific region. . . . Our new focus on

    this region reflects a fundamental truth—the United States has been, and always will be, a Pacific

    nation.”9 Indeed, the United States has engaged with Asia since at least 1784, and U.S. interests

    in the region have been largely consistent for over 230 years. Understanding these interests, and

    potential risks that might emerge over the next decade, is vital to developing a regional strategy.

    This section therefore begins by defining U.S. interests in Asia. The section then addresses a se-

    ries of national security concerns, ranging from China’s rise and North Korea’s belligerence to the

    challenges from nonstate actors.

    U.S. INTERESTS IN ASIA

    Throughout its history, the United States has pursued three interrelated core interests in Asia.

    First, U.S. leaders have sought to protect the security of the American people and U.S. allies. Sec-

    ond, U.S. leaders have attempted to expand trade and economic opportunity. Third, U.S. leaders

    have supported universal democratic norms. These three interests form a longstanding frame-

    work for U.S. engagement in Asia and represent clear and consistent national interests.

    In pursuing these interests, particularly the desire to protect the security of the American peo-

    ple, U.S. leaders have focused primarily on preventing the rise of a hostile hegemon within Asia

    that would threaten U.S. interests in the Pacific. This geostrategic objective motivated U.S. policy

    during the rise of Japan in the first half of the twentieth century and throughout the Cold War

    with the Soviet Union during the second half of the twentieth century. China’s coercive behavior,

    particularly in disputed maritime areas, is once again raising questions about whether the United

    States needs to be concerned about a hostile hegemon in Asia. However, Washington’s contain-

    ment policy during the Cold War is not the historical norm for the United States, nor would such

    a strategy be feasible or appropriate vis-à-vis China today.

    Managing the rise of the Asia-Pacific will require a mix of engagement, deterrence, and reassur-

    ance toward the People’s Republic of China (PRC). Although the changing security environment

    presents challenges, a fundamental strength of the United States is that it has a stake in the

    success of every nation, provided that those states uphold the rules and norms that have under-

    pinned the regional and international order for the last 70 years. China has the potential to play a

    critical role in either reinforcing or undermining regional and international order, so this section

    first addresses the opportunities and risks posed by China’s rise.

    CHINA

    The course charted by China’s reemergence as a great power over the next few decades rep-

    resents the primary strategic challenge for the United States and for the Asian security landscape

    writ large. If China’s economic, military, and geopolitical influence continues to rise at even a

    modest pace during this period, the world will witness the largest shift in the global distribution

    of power since the rise of the United States in the late nineteenth and early twentieth centuries.

    In many ways, it is precisely the multidimensional character of China’s resurgence—whether

  • 11

    ASIA-PACIFIC REBALANCE 2025

    through Chinese initiatives like the Asian Infrastructure Investment Bank (AIIB) or signals from

    the global community, such as the International Monetary Fund’s November decision to add

    China’s currency, the renminbi, to its basket of major global currencies through the extension

    of Special Drawing Rights—that has been among its most striking features. Moreover, if Chi-

    na surpasses the United States as the world’s largest economy in the next 10 to 15 years, it will

    mark the first time in centuries that the world’s economic leader will be non-English speaking,

    non-Western, and non-democratic.

    Of course, these are some major “ifs.” To stay on the path toward realizing this new global bal-

    ance of power, China’s leaders will have to navigate successfully the many challenges they face

    both at home and abroad. They will have to demonstrate sufficient foresight and flexibility to

    respond to immediate tactical concerns while always staying mindful of their geostrategic long

    game. They will have to prove that China’s political and economic rise will be as sustainable over

    the next 30 years as it has been over the last third of a century, even though the task they are

    confronting now, as highlighted by the economy’s present struggles to maintain momentum,

    arguably is much more complex than that faced by their predecessors. They will have to ad-

    dress worsening demographic challenges, particularly population aging. They will have to craft a

    workable strategic framework for channeling the country’s growing wealth and power in a way

    that facilitates China’s return to the dominant position in East Asia without sparking conflict with

    their neighbors or, more importantly, with the United States. More fundamentally, they must find

    an answer to the nagging question of what type of great power China wants to be, including

    whether or not to adhere to long-established global rules they had no hand in shaping.

    Against this backdrop, finding a means to navigate these challenges in a way that avoids war

    and promotes sustained regional, and ultimately global, economic growth is essential to ensur-

    ing security and prosperity. For U.S. allies and partners in the region, getting China right will be

    essential to determining how they can contribute both individually and collectively to keeping

    Asia safe and prosperous in a period of great uncertainty and diminishing resources. Success-

    fully establishing a favorable balance of power in East Asia will be impossible, however, without

    a clearer understanding of the fundamental underpinnings of China’s growing power and influ-

    ence under the Chinese leadership team that took power in 2012.

    Chinese Internal Dynamics

    A debate running through much of the public commentary on China’s return to the world stage

    centers on the personal role of Chinese President and Communist Party General Secretary Xi

    Jinping in shaping Beijing’s emerging strategy. At its core, the discussion about Xi turns on

    assessments of his personal power, and particularly whether China’s shift toward greater global

    activism under his stewardship is a function of Xi’s unique style and personal authority.10 Some

    observers argue that Xi is not much different from his two immediate predecessors, Jiang Zemin

    and Hu Jintao—China itself may be more powerful, but Xi is still a captive of collective decision-

    making.11 Others contend that Xi has palpably more political gravitas and an accompanying unity

    of purpose that look more like the stature of the lions of the Chinese Communist Party (CCP),

    Mao Zedong and Deng Xiaoping.12 Still others suggest that trying to gauge Xi’s strength in a polit-

    ical system as opaque as China’s is a fool’s errand.13

  • U.S. INTERESTS AND RISKS IN ASIA

    12

    Nevertheless, the observable facts of Xi Jinping’s rule thus far do indicate that he has managed to

    accrete substantial power to himself in the comparatively short time he has been in office.14 Re-

    viewing the record of his accomplishments, we can see that he has achieved several things that

    came to Jiang and Hu very late in their tenures, or even eluded them entirely.

    • Xi has used a coercive toolkit, most notably through his anticorruption drive, to rein in the

    institutions that constitute the regime’s key levers of power—the party bureaucracy, the

    security services, and China’s military, the People’s Liberation Army (PLA).

    • Xi has created several new high-level party policy bodies and sits as chair on all of them.

    • Xi has changed the nature of policymaking at the senior-most levels of the Party, dimin-

    ishing the deliberative role of the regime’s formal institutions—especially the government

    ministries—in favor of a more informal, “kitchen cabinet” style of policy advisory.

    • Xi has weakened the authority of his retired peers, making it harder for them to intervene in

    policymaking from behind the scenes.

    This does not mean that Xi wields unencumbered power. Regardless of the number of new poli-

    cy mechanisms he creates or the number of retired and sitting officials he purges, he still faces a

    Politburo lineup that he had very little hand in shaping, and he presumably will have to wait for

    the next party congress in 2017 to change that in any significant way. He also faces passive resis-

    tance to his agenda from powerful vested interests in the state-owned enterprises, their allies in

    the state machinery, and from provincial officials who resent his efforts to reverse three decades

    of devolving power from the center to the localities. Add to this the difficulties of managing the

    economy’s transition to a slower-growth, consumption- and services-led development model, as

    well as the uncomfortable pairing of a bold economic reform vision statement that calls for free-

    ing up market forces with an unrelenting ideological and political retrenchment program, and it

    is clear that Xi’s pathway to becoming the transformative leader he obviously aspires to be is very

    much a journey in progress.

    Chinese Foreign Policy

    With such a full plate at home, it is surprising that President Xi has managed to find the where-

    withal to also craft a redesigned foreign policy strategy. In late November 2014, he delivered

    a keynote address to a Central Foreign Affairs Work Conference of the CCP, the first convened

    under his stewardship as China’s top leader. Such meetings are exceedingly rare and equally au-

    thoritative. In his speech, Xi laid out a sweeping foreign policy platform, suggesting that despite

    the many challenges he and his colleagues are facing at home, a proactive, balanced, and (where

    necessary) more muscular foreign policy approach is likely to be a hallmark of his rule.15 In fact,

    Xi’s approach seems to take as its operating principle that Beijing should be wielding its new-

    found strategic heft in the manner of a traditional great power.

    China’s regional neighbors and the United States should take at least some comfort from Xi’s

    affirmation of several of the key foreign policy precepts that have guided Chinese diplomacy for

    more than a decade. He noted in his speech, for example, that China will continue to follow the

    path of “peaceful development,” or the notion that Beijing’s neighbors and other major partners

  • 13

    ASIA-PACIFIC REBALANCE 2025

    may rest easy that China’s rise can only be accomplished by peaceful means and will be pursued

    with an eye toward achieving “win-win” outcomes for all concerned.16 With China’s rapid military

    modernization, sizable year-on-year defense budget increases, and forthright assertion of its

    territorial sovereignty claims, it is easy to lose sight of the fact that peaceful development acts as

    an important conceptual brake on a runaway military buildup.17 Implicit in its characterization of

    China’s priorities is the notion that economic development—not the path of arms races and mili-

    tary adventurism followed by the Soviet Union—is paramount in securing the country’s return to

    regional preeminence.

    Likewise, Xi acknowledged that China remains in a “period of strategic opportunity” running

    through at least 2020, or roughly the period of Xi’s time in office.18 This concept encapsulates the

    CCP’s primary external strategic guideline and reflects the leadership’s judgment that China is

    enjoying a window in which a benign external security environment allows it to focus on its in-

    ternal development. Moreover, implicit in Xi’s endorsement of the period of strategic opportunity

    is a signal that China is not overtly seeking to be a disruptive power either regionally or globally.

    As long as the concept remains in force, there will be hard limits on Beijing’s willingness and

    ability to set out on a truly revisionist course aimed at fundamentally reshaping the balance of

    power in East Asia. Authoritatively acknowledging that China’s external security environment will

    remain largely placid for the foreseeable future makes it far more difficult for the leadership to

    argue—as have revisionist powers in the past—that they must assert Chinese power more overtly

    and forcefully because the country’s interests in the region are somehow under threat.

    However, Xi’s speech was much more than just old wine in new bottles. Perhaps its most strik-

    ing feature is the way in which its content seems to move China more rapidly away from Deng

    Xiaoping’s longstanding injunction for the country to maintain a low profile internationally.

    Foreign assessments have long argued that China seeks “to become the preeminent Asian pow-

    er.”19 Xi now argues that China’s biggest opportunity lies in the determined leveraging and further

    development of its strength and influence internationally. He also says, “China should develop a

    distinctive diplomatic approach befitting its role [as] a major country.” So, in effect, Xi is telling his

    audience that China already is a great power, and should start acting like one.

    In fact, Xi’s remarks in this vein also would seem to be subtly altering the definition of the period

    of strategic opportunity by stressing greater Chinese activism. Whereas the original framework

    carries the notion of China meekly accepting its advantageous external environment as a gift

    to be sustained within the constraints of its limited capabilities, Xi’s formulation would seem to

    suggest a much more forward-leaning approach whereby China seeks to shape the contours of

    the period of strategic opportunity through its growing power. In his speech, Xi acknowledged

    the deep interdependence between China’s domestic and foreign policies, but again, he chose to

    frame that linkage in a seemingly different way. Instead of being the beneficiary of good fortune

    on its periphery, Xi appears to view China’s domestic development as an engine for the pro-

    motion and expansion of a stable and secure abroad. Implicit in such a description is a sense of

    immense faith in the inevitability and sustainability of China’s rise.

  • U.S. INTERESTS AND RISKS IN ASIA

    14

    China’s neighbors have already been experiencing the operational effects of this burgeoning

    confidence in Beijing’s foreign policy approach. On the upside, Xi has called for improving ties

    with China’s near abroad by pursuing more focused, and more adept, regional diplomacy. In his

    foreign policy address, Xi made repeated references to the need for Beijing to adopt “win-win”

    strategies in its approach to its neighbors, and he suggested that several new elements should

    be added to the country’s diplomatic toolkit—with specific references to systematically develop-

    ing Chinese soft power—to achieve that aim. Xi also sees robust economic diplomacy as a key

    element in his overall diplomatic strategy. Signaling to its neighbors that China fundamentally

    grasps the notion that, in Asia, economics is security, underpins Chinese initiatives like the AIIB

    and the “One-Belt, One-Road” projects, which are aimed at crafting a modern-day version of

    the ancient Silk Road linking China with Central, South, and Southeast Asia, Africa, and Europe.

    Implying through such programs that the economic health of the region is intimately tied to Chi-

    na’s continued growth and prosperity also serves to advance Xi’s seeming predilection for a more

    multidirectional foreign policy approach than that of his predecessors.

    Moreover, Xi sees U.S. power in the region as a lesser constraint on China’s exercise of its influ-

    ence—both benign and coercive—than earlier leaders. In fact, while still meriting pride of place

    in the hierarchy of Beijing’s foreign relationships, ties with the United States seem less of a pre-

    occupation for Xi than for his predecessors. This is not to suggest that Xi is not eager for stable

    and healthy U.S.-China ties. Rather, he seems to prefer a more casual approach to the relation-

    ship that lacks the eagerness and rapt attention that characterized the policies of Hu Jintao and

    Jiang Zemin. This less awestruck view of U.S. power contributes to Xi’s greater tolerance for risk

    and has the important side effect of imbuing Xi with greater confidence to more deliberately

    court China’s other important foreign partners rather than pursuing a single-minded focus on

    the United States. Nevertheless, leaders in China’s neighboring countries are befuddled by the

    leadership’s ostensible inability, at least so far, to sustainably reconcile the contending impulses

    to seek improvements in relations along China’s periphery while simultaneously pushing hard to

    reinforce its expansive territorial claims and to expand its military footprint. Xi’s unflinching asser-

    tion of China’s sovereignty claims over disputed territories in both the East and South China Seas

    is generating a pervasive level of insecurity among China’s bordering nations that risks invalidat-

    ing Beijing’s good-neighbor policy mantra and increasing the desire for a strong U.S. security and

    economic presence in the region. In practical terms, China’s robust embrace of the exercise of its

    newfound power and influence is already having a meaningful impact on its approach to some

    of its critical peripheral relationships that in turn has a direct correlation to the persistence of

    some regional hotspots and the possible emergence of new ones.

    In its management of ties with Japan, for example, the notion that China should behave like a

    traditional great power means that it must seek Japanese acquiescence to a subordinate posi-

    tion in both the bilateral relationship and in the overall regional power dynamic. Much of Beijing’s

    approach is designed to belittle Japan by creating a persistent sense of pressure while simultane-

    ously increasing Tokyo’s sense of isolation. Despite some improvement in ties in recent months,

    there is little evidence that Beijing’s fundamental instinct to diminish Japan’s regional influence has

    changed. Even in its evolving relationship with its erstwhile ally, North Korea, China’s actions seem

  • 15

    ASIA-PACIFIC REBALANCE 2025

    meant to convey to Pyongyang that the “special relationship” of the past is no more, having been

    replaced with a so-called “normal” state-to-state relationship.20 With that as the premise, a Chinese

    leadership bent on wielding its strength will expect North Korea to accept its position as Beijing’s

    client. Given North Korean leader Kim Jong-un’s apparent penchant to turn toward provocations

    when he judges he is being ignored, Beijing’s more dismissive approach could inadvertently con-

    tribute to rising strain on the peninsula. Mounting tensions with Taiwan are also possible, given

    Beijing’s more assertive and risk-tolerant approach throughout the region, as well as the reality that

    polling on Taiwan finds that the population is growing less interested in unification. The 2016 elec-

    tion in Taiwan could give rise to a heightened period of tensions as leaders in Taipei and Beijing

    attempt to manage cross-strait relations in the shadow of these larger trends.

    China’s approach to its territorial disputes in the South China Sea suggests a similar dynamic. Its

    turn to a more robust assertion of its claims seems motivated by two key drivers, one tactical,

    and the other more strategic. On the tactical side, Beijing’s activism reflects its assessment that

    it lost substantial ground to its rival claimants during its 1996–2008 entanglement in managing

    heightened tensions across the Taiwan Strait. China’s irritation at being outmaneuvered by its

    smaller, far-less-powerful competitors, coupled with a growing sense of confidence in its capaci-

    ty to effect meaningful change, combined to unleash the robust pushback that has characterized

    China’s actions for the last several—and particularly the last few—years. More broadly, China’s

    approach reflects its interest in developing more strategic depth on its maritime periphery as

    its interests expand well beyond its shores. In effect, China sees its activities in the South China

    Sea as contributing to its efforts to signal to its regional neighbors, and the United States, that its

    forces intend to operate at times of their choosing out to the Second Island Chain and into the

    Western Pacific.

    Chinese Military Strategy

    In many ways, Chinese ambitions are a reflection of the staggering success of China’s robust mil-

    itary modernization program over the last two decades. Beijing’s desire for advanced military

    capabilities stems from its general assessment of the pillars of U.S. military power projection—as

    demonstrated in the 1991 Persian Gulf War, 1995–96 Taiwan Strait Crisis, former Yugoslavia conflict,

    and more recent operations in Iraq and Afghanistan—and the recognition that these capabilities

    amounted to an insurmountable obstacle for the PLA. It is intuitively obvious that Chinese planners,

    with the assurance of sustained, targeted funding, have responded to these shortcomings by devel-

    oping a suite of capabilities designed to counter each U.S. pillar: aircraft carriers; air superiority and

    long-range precision strike; regional bases and alliances; and space and information dominance.

    Much has been written and said about the most obvious of these anti-access/area denial capa-

    bilities—submarines and anti-ship cruise (ASCMs) or ballistic missiles (ASBMs) to deter U.S. aircraft

    carriers and modern fighter aircraft and surface-to-air missiles (SAMs) to counter U.S. air superi-

    ority.21 Yet, in many ways, the more game-changing leaps have been made in the development

    of robust Chinese electronic warfare capabilities, cyber capabilities, and the PLA’s multilayered

    approach to dealing with U.S. regional bases and alliances, each of which poses unprecedented

    challenges for senior U.S. planners and decisionmakers. Chinese EW arguably is the most im-

  • U.S. INTERESTS AND RISKS IN ASIA

    16

    portant part of the A2/AD revolution, and yet it is poorly understood in the West. In short, the key

    information systems that enable U.S. joint operations—satellite communications, the global posi-

    tioning system (GPS), tactical datalinks, and high-frequency (HF) communications—could be fun-

    damentally degraded, or even rendered unusable, especially the closer U.S. forces get to Chinese

    territory. Similarly, advances in Chinese command, control, communications, computers, intelli-

    gence, surveillance, and reconnaissance (C4ISR) will be the great enabler of PLA capabilities over

    the next 10–15 years. China has invested heavily since the mid-1990s and will continue to do so.22

    By 2030, the PLA can be expected to have persistent regional reconnaissance from space-based

    platforms and near-space tactical platforms—imagery, electronic intelligence (ELINT), and signals

    intelligence (SIGINT)—and timely global reconnaissance from a robust space-based architecture.23

    China has similarly invested in robust cyber espionage and attack capabilities. The most public

    case was the Office of Personnel Management’s 2015 announcement its security clearance data-

    base had been compromised, likely by China.24 A 2013 National Intelligence Estimate is reported

    to have concluded that China was undertaking a cyber-based campaign to undermine U.S. com-

    petitiveness.25 Additionally, many other cyber actions have links to China.26 As China continues

    to develop its cyber capabilities, it is likely that it will be increasingly capable of interfering with

    U.S. military networks as well. It will be very hard for U.S. forces—especially large naval assets and

    forward-deployed forces—to hide from Chinese space, near-space, and cyber ISR.

    The PLA’s response to U.S. regional bases and alliances operates on two levels, one kinetic and

    the other diplomatic and political. China has deployed a host of theater-range weapons—medi-

    um-range ballistic missiles (MRBMs), land-attack cruise missiles (LACMs), and air-launched stand-

    off attack munitions—that give China the capability to strike key U.S. bases, which are high-value

    targets for the PLA and single points of failure for the United States. Chinese capabilities also

    make U.S. regional allies targets instead of sanctuaries, complicating the calculation for host gov-

    ernments and further slowing the U.S. decision cycle in a conflict.

    This dilemma is not limited to U.S. allies and partners, however. The acquisition of theater-range

    weapons also changes the calculus of U.S. policymakers and senior military commanders considering

    the wisdom and implications of U.S. intervention in a conflict close to China's periphery. In the mid-

    1990s, such a prospective U.S. intervention was comparatively low-cost, non-escalatory, and highly ef-

    fective. Today, and especially by 2020, it could be a very dubious calculation. China has credible, even

    if fundamentally unproven, capabilities to disable or destroy U.S. carriers—with incalculable implica-

    tions for U.S. prestige globally—making the efficacy of such an intervention much more questionable.

    Moreover, U.S. military intervention would have significant escalatory potential. The most imme-

    diate options for U.S. policymakers to counter China's growing A2/AD capabilities involve kinetic

    attacks on key nodes and systems—initially air defenses but also long-range precision strike sys-

    tems. The prospect of substantial kinetic attacks against a nuclear power with credible conven-

    tional and nuclear retaliatory capability would give any U.S. president pause, especially when the

    likely proximate cause is an unmistakable move toward independence by Taiwan or the assertion

    by a U.S. ally or partner of murky sovereignty claims in the South China Sea. Efforts to manage

    crises and escalation dynamics will be required to minimize the risk, especially given vulnerabili-

    ties of both U.S. and Chinese systems in space and cyberspace.

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    ASIA-PACIFIC REBALANCE 2025

    Despite its impressive technical modernization, senior commanders and military scholars in-

    dicate that the PLA retains substantial shortcomings when it comes to questions of “software,”

    particularly in its inability to translate weapons modernization into combat power for conducting

    truly integrated joint operations.27 While most foreigners focus on new equipment, PLA officers

    understand their doctrine requires the integration of all forces, old and new, military and civilian,

    into joint operations that incorporate firepower, mobility, information operations, and special op-

    erations.28 The PLA undoubtedly has complicated any U.S. military intervention calculus, partic-

    ularly in a Taiwan scenario, but the PLA’s assessment of the Chinese military’s actual warfighting

    capability remains quite negative. To some extent, these challenges are all the more difficult for

    the PLA because it is rooted in its standing as the armed wing of the CCP. Other PLA writings,

    for example, are more specific, arguing that the current command structure, modes of train-

    ing, command and control (C2) systems, and modes of operation are not sufficient for Chinese

    strategic imperatives or for the demands of modern warfare.29 China’s current national command

    structure also dates from 1985, when China’s proximate security preoccupation was the Soviet

    Union. That structure has little inherent capacity for joint service integration and expeditionary

    FIGURE 1: Chinese Headquarters (HQ) Locations and Missile Ranges

  • U.S. INTERESTS AND RISKS IN ASIA

    18

    operations; in fact, it is a key impediment. Other “software” constraints on the PLA’s fighting ca-

    pabilities include a lack of combat experience since 1979; a truncated non-commissioned officer

    (NCO) corps that has failed to create a strong cohort of small unit leaders; pervasive corruption,

    including in the senior officer corps; and the PLA’s standing as “the Party’s Army” instead of the

    national military of China.

    Recent adjustments to China’s official military strategy only serve to bring these deficiencies into

    sharper focus. In May 2015, the PLA issued its latest Defense White Paper, China’s Military Strategy,

    that indicates China’s national military strategy has changed. The paper notes that the conduct

    of warfare has shifted to give even greater prominence to the application of information tech-

    nology in all aspects of military operations. It also states that the military has been handed a new

    “strategic task” to “safeguard the security of China’s overseas interests,” especially in the maritime

    domain.30 Yet, Chinese military doctrinal writings make clear that the PLA judges itself incapable

    of winning wars under “informatized conditions”—meaning a battlefield with robust jamming and

    demanding requirements for agile C4ISR.31 These writings also indicate that the PLA sees itself as

    unable to defend Chinese interests more broadly under both wartime and non-war operations

    (such as multilateral security operations and disaster relief).

    Defense reform priorities mooted in conjunction with the broad package of reform guidelines

    issued following the November 2013 Third Plenum of the 18th Central Committee suggest the

    leadership is aware of these shortcomings and is seeking to address them. Of particular interest

    is the Plenum’s very detailed description of pursuing specific structural reforms. It called for the

    creation of a “sound . . . joint operations command structure and theater joint operations com-

    mand system,” as well as the advancement of “reform of the joint operations training and sup-

    port system.”32 Official Chinese media reports have announced that the restructuring is begin-

    ning, with other media accounts suggesting a new structure will begin to take shape as early as

    January 2016. Should the proposed reforms be successfully implemented, the PLA will emerge as

    a much more capable, lethal, and externally oriented fighting force.

    The PLA’s enhanced mission to “safeguard the security of China’s overseas interests” marks Chi-

    na’s clearest articulation yet of its intent to operate further afield, making it inevitable that such

    activities will affect U.S. interests.33 To address the new challenges in the maritime domain, the

    white paper calls for a fundamental retooling of the PLA’s strategic orientation by noting, “the tra-

    ditional mentality that land outweighs sea must be abandoned.”34 Consequently, the document

    states that the PLA Navy (PLAN) “will gradually shift its focus from ‘offshore waters defense’ to the

    combination of ‘offshore waters defense’ with ‘open seas protection.’ ”35 Under these auspices, the

    PLA in the near future will be operating well beyond the First Island Chain and into the Indian

    Ocean. It likely will play substantial roles in regional disaster assistance relief and will have a

    significant expeditionary capability for noncombatant evacuation operations (NEOs) for Chinese

    citizens and corporate employees in Africa, South Asia, and beyond. The call for the PLA to adopt

    this expanded mission set is of greatest concern to the United States, as it will gradually extend

    the reach of the PLA and emphasize “nontraditional security” operations such as counterterror-

    ism, humanitarian assistance and disaster relief (HA/DR), economic security, public health, and

    information security.36

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    ASIA-PACIFIC REBALANCE 2025

    By 2030, the Chinese likely will have multiple aircraft carrier strike groups (CSGs), facilitating

    the overawing of lesser powers, enhanced regional prestige, and the demonstration effect of

    near-constant presence. For rival claimants in the South China Sea, this is a game changer. There

    will almost always be a Chinese CSG floating in contested waters, or within a half-day’s steaming

    time. Whether they have seized territory or negotiated a resource-sharing scheme with some or

    all of the other claimants, the South China Sea will be virtually a Chinese lake, as the Caribbean

    or the Gulf of Mexico is for the United States today. China’s military capability and capacity will

    shape how the region behaves toward them without a need for menacing Chinese behavior. The

    PLAN will have the ability to make U.S. naval operations in the South China Sea or the First Island

    Chain a risky proposition in a contingency, other than U.S. submarines. China also will be a major

    weapons exporter, including very advanced EW, ISR, and precision strike capabilities that compli-

    cate U.S. military planning globally.

    Emerging Chinese military capabilities are not the only risk for U.S. interests stemming from

    China’s return to the world stage. How a rising China will choose to interact with established

    global institutions, and the rules and norms those bodies have promulgated and follow, also

    requires U.S. vigilance and involvement. With its various economic initiatives, Beijing, and, more

    particularly, the CCP, seeks to reinforce the emerging narrative that China is moving to the cen-

    ter of global economic activity, strength, and influence even, paradoxically, as its own economy

    struggles to maintain momentum. China is keen to nurture the notion that a new global order is

    unfolding, and that the world expects that new order to more thoroughly incorporate Chinese

    influence and preferences. There also is a growing global consensus that it is better to integrate

    China into those established institutions rather than have China create more parallel constructs

    where it has the leading, or even sole, voice. As such, U.S. policymakers will have to determine

    how, where, and when the United States will work with China as the story of China’s return to

    great power status continues to unfold.

    NORTH KOREA

    The Democratic People’s Republic of Korea (DPRK, or North Korea hereafter) is perhaps the most

    opaque country in the world and continues to pose risks to the United States and its allies and

    partners in the region. North Korea’s pursuit of nuclear weapons and ballistic missiles represents

    a persistent threat to regional security. North Korea’s conventional capabilities and belligerent

    actions also continue to undermine stability on the Korean Peninsula. On the other hand, North

    Korea’s political instability, internal repression, and economic backwardness promise a massive

    humanitarian crisis should the regime collapse.

    North Korean Internal Dynamics

    The North’s young leader, Kim Jong-un, is in the midst of his fourth year as head of state. His

    execution of 70 high-level officials since taking office (according to South Korean statements)

    suggests a significant degree of churn inside of the Pyongyang elite.38 As the regime tightens

    its grip on power, North Korean society by contrast is growing more open, albeit slowly, as the

    proliferation of official and black markets creates new demands for information, opportunity, and

  • U.S. INTERESTS AND RISKS IN ASIA

    20

    contact with the outside world. The lack of any fundamental economic reform under Kim puts

    added pressure on the regime to prove its legitimacy. While no one can predict the trigger, these

    forces potentially pull the state in disruptive directions.

    The North Korean regime’s primary goal is to perpetuate the personality cult of the Kim fami-

    ly. The risk posed by the regime’s weapons and behavior is severe, particularly the potential for

    crisis instability and the regime’s record of human rights abuses, proliferation of weapons of

    mass destruction (WMD), and illicit activities such as counterfeiting, drug trafficking, and human

    trafficking. North Korea still seeks reunification of the peninsula through overthrow of the rival

    regime in the south. This objective has been stymied by successful deterrence on the part of the

    U.S.-Republic of Korea (ROK) alliance.

    Short of unification, Pyongyang seeks to use coercive bargaining to achieve more immediate goals

    vis-à-vis South Korea and the United States. This includes temporary concessions on its missile

    or nuclear programs (e.g., production or test freezes) to extort funding, food, or other diplomatic

    gains. At the extreme, Pyongyang may want to hold at risk ROK and U.S. assets on the peninsula

    through missile or artillery threats in an effort to extort larger prizes.39 North Korea continues to

    operate aggressively with naval patrols and the positioning of artillery along the Demilitarized Zone

    (DMZ), Northern Limit Line, and northwest islands. In response to recent world condemnation of

    its human rights abuses, another objective may be to deter with force all attempts to slander the

    regime’s legitimacy. In this regard, Pyongyang has threatened to attack civilian balloon drop activ-

    ities that send information, money, and food to the North Korean people. It has also detained an

    unusually large number of foreign visitors in recent years for “anti-regime” activities.40

    North Korea appears to be demonstrating, or seeking to demonstrate, a higher tolerance for “risk”

    and escalation than in the past. It is possible that Kim is attempting to manage legitimacy chal-

    lenges or address concerns about his inexperience. He may also be motivated by the calcula-

    tion that Pyongyang’s nuclear weapons capability allows more room for coercive acts. This new

    development requires further study to determine whether this is a slight modification in North

    Korean behavior, or the beginning of a larger shift.

    North Korea Foreign Policy

    Since 2010 Pyongyang has not attempted another major provocation like the Cheonan sinking or

    the Yeonpyeong Island artillery shelling.41 Although North Korea placed landmines in a frequently

    patrolled area in the DMZ, the government does not appear to be engaging in either a provoca-

    tion cycle or a diplomacy cycle. North Korea’s fiery rhetoric does not mask a desire for dialogue,

    but neither is it a precursor to aggressive behavior. Nevertheless, Pyongyang’s tolerance for risk

    appears higher than it has been for years.

    There are several possible explanations for Pyongyang’s recent behavior. North Korea might have

    rejected dialogue because the Obama and Park governments appear distracted by other issues.

    Moreover, even if Pyongyang might be able to get a deal with either president, neither can be

    reelected, so any deal would likely be undone once the incumbent is gone. A second theory is

    that Kim is having domestic problems. Purges are nothing new in North Korea, and the recent

    removal of the defense minister is only the latest result. Yet the pace of these purges suggests

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    ASIA-PACIFIC REBALANCE 2025

    there remain significant internal difficulties. DPRK domestic instability often influences its exter-

    nal behavior. For example, when Kim Jong-il had a stroke at a critical time in the Six-Party Talks

    in 2008, North Korea was unable to respond to proposals for moving the agreement forward. A

    third explanation for North Korea’s attitude has to do with strength rather than weakness. Kim

    may be methodically building his capabilities while the United States is distracted by events else-

    where in the world and South Korea is focused on boosting economic growth. Washington and

    the United Nations (UN) have telegraphed clearly that the next provocation will draw a new set

    of financial sanctions. North Korea may therefore be biding its time by seeking to develop cyber

    capabilities and enlarge its missile arsenal. A fourth possibility is that North Korea is focused not

    on internal dissension but actually internal economic reform and rehabilitation. Signs that the

    regime is instituting modest private incentives in farming could reflect reform intentions. This

    could suggest some receptiveness to greater interaction with the outside world.

    North Korean Military Strategy

    North Korea appears determined to maintain its “songun” policy of putting its military first, as

    well as its “byungjin” line of striving for economic developments while also building nuclear

    weapons. North Korea’s desire to strengthen its deterrent posture has enabled continued military

    investment despite severe economic conditions throughout the country. The DPRK maintains

    a military comprising 1.2 million personnel, including 1 million in t